1. Below is the projected financial information for Daisy Digital Data (DDD) for the next four quarters:

0	Qtr 1	Qtr 2	Qtr 3	Qtr 4	Year Total
Sales	10,000	12,000	16,000	9,000	47,000
COGS	7,000	8,400	11,200	6,300	32,900
Depreciation	400	600	800	800	2,600
Net income*	800	1,100	2,100	600	4,600
Net capital spending	1,000	1,200	0	0
Average
Accounts receivable	1,200	1,400	1,300	1,000	1,225
Inventory	2,800	3,400	4,600	2,200	2,100	3,020
Accounts payable	1,600	1,900	2,700	1,200	1,300	1,740

• Net income includes additional expenses other than those listed.

What are DDD’s permanent and temporary working capital needs? If DDD ends quarter 0 with $200 in cash, then what are DDD’s maximum borrowing needs and in what quarter does this occur? What are DDD’s average operating cycle and average cash conversion cycle (in days).

Answer rating: 100% (QA)

DDDs permanent working capital needs are the amount of funds needed to cover the difference between ... View the full answer